Municipal and Environmental Infrastructure where TC is crucial

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Municipal and Environmental Infrastructure
where TC is crucial

• Doncho Barbalov, Associate Banker, MEI
• 10th CEI Summit Economic Forum
• Sofia, 20 November 2007

2
EBRDs role in the municipal sector

• Structuring the financing of municipal
  infrastructure, equipment and services
• Promote commercialisation and corporatisation of
  services
• Development of regulatory structures
• Promotion of appropriate private sector
  involvement
• Environmental improvement
• Facilitate donor grant and commercial loan
  co-financing

EBRD helps municipalities meet their
infrastructure needs
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Water supply and wastewater treatment
Investment challenges

• Meeting EU water and wastewater standards
• Need to increase investments in maintenance and
  asset renewal
• Improve water supply standards
• Improve collection and treatment of sewage
• Improve operational and financial performance of
  municipal water and sewerage companies

EBRD water and sewerage Projects
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EBRD is active in waste management projects
Investment challenges

• Meeting EU waste standards
• Efficiency and frequency of collection of waste
• Improve adequacy of waste disposal
• Prevent groundwater contamination due to
  inadequate treatment of leachate
• Need to organise waste management systems

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EBRD is active in urban transport projects
Investment challenges

• Key factor in promoting economic growth
• Rehabilitation of public transport in urban areas
  and need to replace ageing and operating
  equipment
• Improve financial performance of transport
  operators to allow access financing
• Need to introduce public service contracts
  between transport authority and operator
• Investment in public transport needed to counter
  the negative effects of rapid motorisation

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EBRD is active in district heating
Investment challenges

• Meeting environmental and public health standards
• Need to increase investment in modernization of
  heat generation facilities, rehabilitation of
  distribution networks and installation of control
  equipment
• Improve efficiency of energy and water usage
• Improve heating and hot water standards for the
  consumers
• Improve operational and financial performance of
  municipal district heating companies

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CEI TC assistance past and present

• Past
• Bulgaria Water and Waste Water Project (now
  Burgas Water signed 8 June 2005) 300,000 for
  Feasibility Study and Environmental Analysis
• Brasov Urban Transport Project Company Loan
  City Loan (signed 28 Oct 2005) 150,000 for
  Corporate Development Programme for the Company
  and Advisory Services to the City
• Present
• Crimea Municipal Infrastructure - 50,000 for
  IFRS Audit of the Company (Yalta Vodocanal)
• Kiev City Transport (signed 17 Aug 2007) -
  60,000 for Financial Due Diligence and IFRS
  Audit of the Metro Company (Kiev Metropolitan)
• Tirana Urban Transport (signed 30 June 2006) -
  Creditworthiness Enhancement Programme for the
  City
• Rousse Water (signed 20 June 2006) -
  Creditworthiness Enhancement Programme for the
  City

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What does TC help us achieve

• Transition impact objectives
• Sustainability
• Affordability
• Capacity development
• Transfer of skills

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Types of TC required

• Pre-signing (preparation)
• IFRS Auditing
• Feasibility Study
• Technical Financial Environmental Due Diligence
• Post-signing (implementation)
• Creditworthiness Enhancement
• Financial and Operational Performance Improvement
• Project Implementation Support
• Corporate Development

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Current TC needs in the region
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TC support is critical (i)

• Financial and Operational Performance Improvement
• Programme (FOPIP)
• Improve the Companys operational and financial
  management in order to strengthen the capacity to
  service debt while providing high quality water
  and sewerage services
• establishment of indicators for measurable
  improvements of operational efficiency and levels
  of service
• increased revenue collection rates
• improved transparency and accountability to
  consumer
• facilitation of outsourcing for improved
  financial viability and customer service

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TC support is critical (ii)

• Creditworthiness Enhancement Programme (CEP)
• TC support to assist the City to improve its
  financial management and administration
• Focus on key areas revenue management, capital
  investment, asset management, municipal services,
  management information systems
• Support for improved regulatory oversight and
  predictable tariff regimes

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Case Study Rousse Water Investment Project

• EBRD financing of 8 million supported by
  Government of Bulgaria, Ministry of Regional
  Development and City of Rousse
• Upgrade and expansion of water and wastewater
  infrastructure
• Compliance with EU environmental directives and
  reduced pollution of river Danube
• Public Service Contract between Company and City
  to ensure stable revenues at Company level
• CEI TC Support (200,000) - Creditworthiness
  Enhancement Programme
• Other TC support - Project Implementation Support
  (Denmark - 230,000) Financial and Operational
  Performance Improvement (Netherlands - 300,000)

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Case Study Bijeljina Waste Water Supply

• EBRD sovereign loan of 7 million to the State of
  Bosnia Herzegovina signed 17 July 2007
• Project implemented by the public water and waste
  water management company Vodovod i Kanalizacija
  Bijeljina A.D.
• Develop waste water collection network in the
  town of Bijeljina
• Prevent further pollution of underground water
  reserves used - only source of potable water for
  population
• TC support Feasibility Study (EU DISF) Project
  Management Assistance (Sweden - 437,048)
  Financial and Operational Performance Improvement
  (WB Fund (tbc) - 152,220)

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Case Study Tirana Municipal Roads Development
Project

• Sovereign loan of 14.6 million - 8 million
  being on-lent to the City of Tirana and 6.6
  million being implemented by the Ministry of
  Transport
• Rehabilitation and upgrading of a section of the
  Tirana Ring Road and the Kamza interchange
• Sustainable Transport Strategy to address
  significant deficiencies in provision of current
  urban transport services and infrastructure
• First EBRD transaction in the Albanian municipal
  sector
• CEI TC Support (350,000) - Creditworthiness
  Enhancement Programme
• Other TC support - Sustainable Transport Strategy
  (Italy - 250,000)

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Case Study Plovdiv Water Project - Bulgaria

• Loan of EUR 11.4 million to Plovdiv Regional
  Water Company
• Board Approved 6 November 2007
• Rehabilitate the water supply infrastructure
• Environmental benefits
• TC Support Technical, Financial and
  Environmental Due Diligence (Bank funded -
  22,500) Financial and Operational Performance
  Improvement (donor tbc - 375,000)

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Contact details

• Doncho Barbalov
• Associate Banker, Municipal and Environmental
  Infrastructure
• Tel [phone]
• barbalod_at_ebrd.com
• 17 Moskovska Str.
• Sofia 1000
• Bulgaria